Canada’s economy expanded for a
sixth consecutive month in February, led by manufacturing and
spending related to the Vancouver Winter Olympics.

Gross domestic product increased 0.3 percent from January,
Statistics Canada said today in Ottawa. The result matched the
median of 21 estimates by economists surveyed by Bloomberg News.

The economy grew at a 5.8 percent annualized first-quarter
pace, the Bank of Canada forecast last week when it dropped a
“conditional commitment” to keep its key lending rate at a
record low 0.25 percent until July. Governor Mark Carney said
yesterday that future moves to tighten monetary policy aren’t
“pre-ordained” and depend on future growth and inflation.

“People who have the money are spending it,” said Alan
Preston, who has owned the Hearts and Flowers shop for 30 years
in Charlottetown, Prince Edward Island. Preston said he started
taking more large orders around the start of the year, a sign
that last year’s recession was over.

The Canadian dollar traded for C$1.0093 per U.S. dollar at
9:55 a.m. Toronto time, from yesterday’s C$1.0052. The currency
has gained 0.6 percent this month as investors increased bets
that the Bank of Canada will raise interest rates.

The economy should record first-quarter growth of at least
5 percent, said Paul Ferley, assistant chief economist at Royal
Bank of Canada in Toronto. “The strength being sustained is
clearly indicating that there is less of a need for the stimulus
already in place,” Ferley said.

Manufacturing rose 1.2 percent in February, accounting for
about half of the economy’s growth, on gains in output of
metals, pharmaceuticals and beverages.

Canadian factories were among the hardest hit by last
year’s recession, and Carney said yesterday that persistent
strength in the country’s dollar is a risk to the recovery. The
Canadian dollar was worth more than its U.S. counterpart on
April 6 for the first time since July 2008.

“The dollar around parity in some ways is a good thing,”
Canadian National Railway Co. Chief Executive Officer Claude
Mongeau told reporters in Montreal April 27. “The dollar forces
people to adjust.”

U.S. Rebound

Canadian exporters are getting help from a U.S. economy
that is also showing a recovery. The Commerce Department
reported today that the U.S. economy expanded at a 3.2 percent
annual rate in the first quarter as households spent more
freely.

In a separate report, Statistics Canada said that factory
prices fell 0.4 percent in March, the first decline in five
months. Excluding the effect of the Canadian dollar’s rise
against its U.S. counterpart, the index would have increased 0.4
percent.